Enhancements in Swift’s Payment Investigation Solution

Global cross-border payments system SWIFT is introducing an advanced solution for handling payment investigations, designed to drastically cut down the time required to resolve delayed payments. Building on ISO 20022 standards, this new initiative aims to be a pivotal use case for widespread implementation of the latest messaging protocol.

Annual losses from labor-intensive investigations into delayed payments amount to over $1.6 billion globally, according to SWIFT. The company asserts that its innovative solution can save financial institutions more than $600 million per year and halve the time needed for case resolution by up to 80%.

Cross-border payment processing speed has seen improvements over recent years; nearly all transactions on SWIFT are routed within an hour of initiation. Yet, missing critical information in a transaction can lead to delays, with five to ten working days often required for financial institutions to resolve these issues. The total time spent per single investigation has remained steady at 200 hours annually for the past five years.

Utilizing New Standards

SWIFT’s new solution streamlines the investigative process through ISO 20022 data, which improves transparency and interoperability across networks. ISO 20022 compliant messages carry detailed structured data that can be easily understood by all parties involved in a transaction.

Beyond transactions conducted over SWIFT’s network, the protocol is also applicable to any payments utilizing UETR (Unique End-to-End Transaction Reference), which offers visibility into a payment’s status and location at every stage of its journey.

A Use Case for ISO 20022

As of November, SWIFT mandates the use of the ISO 20022 protocol for all payments processed on its network. ISO 20022 provides a unified messaging framework intended to boost communication interoperability among financial institutions, their market infrastructures, and end users.

Despite these benefits, adoption rates remain sluggish due to some financial institutions’ reluctance to recognize the full potential of ISO 20022. “Many financial institutions may view ISO 20022 as irrelevant until they or their partners face higher costs in the future,” explained James Wester, Co-Head of Payments at Javelin Strategy & Research.